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Resolving disputes betweenconsumers and financial businesses:Current arrangements in central and eastern Europe

Bulgaria Estonia Lithuania Slovakia Croatia Hungary Poland Slovenia Czech Republic Latvia Romania

By David Thomas and Francis Frizon for

January 2012

THE WORLD BANKGlobal Program on Consumer Protection and Financial Literacy

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69916 v2

Resolving disputes between consumers and financial businesses: Central and eastern Europe 1

Contents

Preface

Glossary ........................................................................................................................ page 2

Introduction ................................................................................................................... page 3

Executive summary ......................................................................................................... page 6

Consumer conditions compared.........................................................................................page 12

Country studies

Bulgaria ........................................................................................................................ page 16

Croatia ......................................................................................................................... page 20

Czech Republic .............................................................................................................. page 27

Estonia ......................................................................................................................... page 31

Hungary ....................................................................................................................... page 35

Latvia ........................................................................................................................... page 38

Lithuania ...................................................................................................................... page 46

Poland .......................................................................................................................... page 52

Romania ....................................................................................................................... page 58

Slovakia ........................................................................................................................ page 68

Slovenia ....................................................................................................................... page 71

This report is a product of the authors, overseen by staff from the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations and conclusions expressed in this report do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent.


Preface

Glossary

Abbreviations and acronyms

ADR = alternative dispute resolution body (for out-of-court redress)

CEE 10 = the 10 countries from the CEE 11 that are already members of the EU

CEE 11 = the 11 central and eastern European countries covered by this report1

EU = European Union2

FIN-NET = European network of financial ombudsmen and financial ADRs3

GDP = Gross domestic product

Terminology

‘Ombudsman’ is recognised worldwide. This report uses it to include equivalent bodies that in some countries use other titles, such as ‘arbiter’.

‘ADR’ is used in this report to cover both ombudsmen and other types of out-of-court redress bodies such as complaints boards and complaints departments of financial regulators.

‘Mediator’ is used for different purposes in different countries. Most use it for those ADRs that only mediate. But some use it for those with a wider role, similar to an ombudsman.

‘Microenterprises’ (the smallest businesses) and ‘small and medium enterprises’ are EU-wide definitions.4

‘Financial business’ is used in this report to cover the whole range of businesses that provide or distribute credit, financial services or payment services.

‘Intermediary’ is used to cover a financial business (such as an insurance broker) that distributes the financial products of others.

1 The CEE 11 are Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and

Slovenia.2 The 27 EU member states are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France,

Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and UK. Croatia is on track to become a member.

3 http://ec.europa.eu/internal_market/fin-net/index_en.htm 4 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:124:0036:0041:en:PDF

http://ec.europa.eu/internal_market/fin

http://eur


Preface

Introduction

Purpose of this report

This report surveys the current position in establishing and developing financial ombudsmen and other financial ADRs in Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia (the CEE 11).

It draws on previous reports from The World Bank and others, which underlined how financial ombudsmen can help to increase consumer confidence in financial services, and hence also benefit financial businesses by helping markets to improve and grow.

It also draws on information from the European Commission that compares the attitudes of consumers across Europe – their level of confidence in existing levels of consumer protection, their readiness to complain and the relative ease of using ADRs compared to the courts.

The factual information about the existing arrangements in the CEE 11 is published in good faith, following enquiries with the relevant bodies, and was sent to the bodies concerned for comment during the consultation period that preceded the finalisation of this report.

The report focuses on financial ombudsmen and financial ADRs covering banking and credit and alsoinsurance – but details are also provided of out-of-court redress arrangements in relation to packaged investments and stock exchange transactions where these are readily available.

There are currently significant gaps in coverage – both by country and by sector. And a number of the ombudsmen/ADRs that exist do not appear to comply with recognised European Union standards for out-of-court redress bodies.

In November 2011 the European Commission proposed a directive on ADR, intended to come into force in 2014.5 This will require European Union member states to establish ADRs for all consumer sectors, and to ensure that these ADRs comply with compulsory standards,

Linked report

This report is published alongside another report from The World Bank – Resolving disputes between consumers and financial businesses: Fundamentals for a financial ombudsman – which explains the foundations on which financial ombudsmen can be created and developed.

That other report also includes details of particular issues that are relevant to financial ombudsmen and other financial ADRs in the European Union. All of the CEE 11 are members of the European Union – except for Croatia, which is on track to become a member.

The European network of financial ombudsmen and financial ADRs (FIN-NET) covers cross-border financial disputes (where the consumer is in one EU member state and the financial business is in another). FIN-NET members must comply with two requirements – explained in that other report.

5 http://ec.europa.eu/consumers/redress_cons/adr_policy_work_en.htm

http://ec.europa.eu/consumers/redress_cons/adr_policy_work_en.htm


The first requirement is that the financial ombudsman/ADR must accept the terms of the FIN-NET memorandum of understanding which covers operational requirements in cooperating with other members of FIN-NET in cross-border cases.6

The second requirement is that the financial ombudsman/ADR must comply with the seven principles in European Commission Recommendation 1998/257/EC: the independence, transparency, adversarial, effectiveness, legality, liberty and representation principles.7

The standards in Recommendation 1998/257/EC are likely to be superseded by similar ones in the proposed European directive on ADR. Those standards are intended to be compulsory for all ombudsmen/ADRs in the European Union from 2014.

Acknowledgements

This report was prepared by:

David Thomas (Principal Ombudsman, Financial Ombudsman Service in the UK); and Francis Frizon (Insurance Mediator in France).

Having originally qualified as lawyers, both of them have been:

ombudsmen for more than a dozen years; steering committee members of FIN-NET (the European network of financial ombudsmen/ADRs); steering committee members of INFO (the worldwide network of financial ombudsmen).8

They are grateful to:

Sue Rutledge, Juan Carlos Izaguirre, Tomáš Prouza and their colleagues in the Global Program on Consumer Protection and Financial Literacy at The World Bank who have overseen this report;

the authors of the various documents from The World Bank and other organisations that are cited in this report and provide an essential foundation for it;

Jean-Yves Mulle, Malgorzata Feluch and their colleagues (including Irena Vukic) in the European Commission’s Internal Market Directorate General;

colleagues from other financial ombudsmen and financial ADRs who have provided information about their own arrangements; and

the following who helped collect information on bodies other than their own:- Živa Drol-Novak from the Consumers Association, Slovenia;- Alin Iacob, a Romanian member of the EU Financial Services Consumer Group;- Ana Keglevic from the Law Faculty, Zagreb University, Croatia;- Frantisek Klufa, former Financial Arbiter, Czech Republic;- Marekas Močiulskis from the State Consumer Rights Protection Authority, Lithuania;- Razvan Resmerita, Director of the European Consumer Centre, Romania; and- Małgorzata Wiecko from the Insurance Ombudsman, Poland.

6 http://ec.europa.eu/internal_market/fin-net/docs/mou/en.pdf7 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31998H0257:EN:NOT8 www.networkfso.org – 49 member financial ombudsman schemes in 31 countries worldwide.

www.networkfso.org

http://ec.europa.eu/internal_market/fin

http://eur


During the consultation period, the draft of this report was presented at three international meetings:

the INFO annual conference in Canada in September 2011; the FIN-NET bi-annual meeting in Malta in October 2011; and a financial ombudsman conference in Armenia in October 2011.

Comments in this report do not necessarily reflect the views of the organisations mentioned.


Preface

Executive summary

Consumer confidence

Consumer confidence in existing consumer-protection measures, across all sectors, is below the European Union average in all of the CEE 10.

Consumers in the CEE 10, apart from those in Slovenia, are less likely than the EU average to complain if something goes wrong.

In all of the CEE 10, consumers find it less easy than the EU average to resolve disputes with sellers/providers either through ADR or the courts.

But throughout the EU, including in the CEE 10, consumers and sellers/providers prefer ADR to the courts for resolving disputes.

Bulgaria

The World Bank reviewed the financial ombudsman/ADR position previously in 2009.

The Diagnostic Review of Consumer Protection and Financial Capability in Bulgaria9 recommended that consideration should be given to creating a financial ombudsman, to replace existing conciliation committees.

At present, consumers have free access to the legally-established Conciliation Commission for Payment Disputes, which provides non-binding recommendations in disputes about credit cards, loans, payment services and electronic money.

There is no financial ombudsman or financial ADR for other aspects of banking or for any aspects of insurance or other financial products. Bulgaria has no member of FIN-NET to handle cross-border cases.

As recommended in 2009, consideration should be given to creating a financial ombudsman – which should adopt the standards that will enable it to become a member of FIN-NET.

Croatia


The Diagnostic Review of Consumer Protection and Financial Literacy in Croatia10 said that the proposed mediation centre for the banking sector was unlikely to be successful, and that consideration should be given to establishing a financial ombudsman.

9 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/RO_-_CPFL_Vol_I.pdf10 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/Croatia_CPFL_Vol1_English.pdf

http://siteresources.world



In banking, all that is available to consumers at present is mediation. Consumers have to pay a fee for that (though the fee was being waived until the end of 2011).

In insurance, consumers have free access to mediation, or to an industry-appointed ombudsman who can provide a non-binding recommendation limited to complaints about the insurance code of ethics.

Croatia in not yet a member of the European Union. It is not eligible to join FIN-NET for cross-border disputes, but the Chamber of Economy was accepted as a FIN-NET observer in October 2011.

As recommended in 2010, consideration should be given to establishing a financial ombudsman –which should adopt the standards that will enable it to become a member of FIN-NET.

Czech Republic


The Technical Note on Consumer Protection in Financial Services in the Czech Republic11

recommended that the existing Financial Arbiter (then dealing only with electronic payments in the banking sector) should be converted into a financial ombudsman covering all areas of the financial sector.

In banking, consumers have free access to the legally-established Financial Arbiter – which now covers payment services and (since July 2011) consumer credit and some investment products. The Arbiter provides mediation and decisions binding on the financial business and consumer.

In insurance, there is currently no financial ombudsman/ADR – but it is hoped that the Financial Arbiter’s jurisdiction will be extended to insurance, and additional investment products, in 2012.

The Financial Arbiter is a member of FIN-NET to cover cross-border cases.

Consideration should be given to continuing to extend the Financial Arbiter’s jurisdiction until it covers all areas of the financial sector, as recommended in 2007.

Estonia

The World Bank has not previously reviewed the financial ombudsman/ADR position in Estonia.

In both banking and insurance, consumers have free access to the legally-established Consumer Complaint Committee (provided the claim is for at least €20). The Committee provides a non-binding recommendation, and is a member of FIN-NET.

In insurance, consumers have the alternative of free access to the industry-appointed Insurance Conciliation Body, which provides mediation or a non-binding recommendation. It is not a member of FIN-NET.

11 http://siteresources.worldbank.org/EXTECAREGTOPPRVSECDEV/Resources/CR_CPFS_12June07.pdf



Hungary

The World Bank has not previously reviewed the financial ombudsman/ADR position in Hungary.

Both banking and insurance, as well as other financial services, have been covered by the Financial Arbitration Board since 1 July 2011.

This was established by law and is run by the Hungarian Financial Supervisory Authority. It is a member of FIN-NET.

It provides free access to consumers. It offers mediation, a non-binding recommendation and (if both parties agree in advance) a decision that is binding on both parties.

Latvia

The World Bank previously reviewed the financial ombudsman/ADR position in 2010.

The Diagnostic Review of Consumer Protection and Financial Literacy in Latvia12 and Action Plan on Financial Consumer Protection in Latvia 13 recommended:

The Consumer Rights Protection Centre (which is a government agency) should make sure it is legally equipped to deal with all relevant financial services complaints it receives, proposing legislative change if necessary.

Consideration should be given to establishing a financial ombudsman by law – to replace the ombudsmen established by the banking and insurance associations, which were not seen by consumers as independent and were little-used.

At present, the government-appointed Consumer Rights Protection Centre has a very limited role in relation to individual disputes.

In banking and insurance, there are industry-appointed ombudsmen – which provide non-binding recommendations.

But consumers appear to doubt the impartiality of these ombudsmen and seldom use them – and both of them charge consumers a fee (though this is refunded if the consumer wins).

The industry-based Motor Insurers’ Bureau provides non-binding recommendations in disputes between third parties and motor third-party liability insurers.

Latvia has no member of FIN-NET to handle cross-border disputes.

The Consumer Rights Protection Centre complies with Commission Recommendation 1998/257/EC, but does not propose to join FIN-NET – because of the Centre’s limited role in individual disputes.

The banking and insurance ombudsmen, and the Motor Insurers’ Bureau, have not demonstrated that they comply with Commission Recommendation 1998/257/EC.

12 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/Latvia_CP_Vol_1_En.pdf 13 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/LV_Action_Plan_ConsultativeDraft.pdf




The existing banking and insurance ombudsmen should adopt the standards that will enable them to become members of FIN-NET – or as recommended in 2010, consideration should be given to establishing a financial ombudsman by law.

Lithuania


The Diagnostic Review of Consumer Protection and Financial Literacy in Lithuania14recommended:

The Insurance Supervisory Commission should retain its consumer protection role in insurance while the State Consumer Rights Protection Authority increases its capacity and expertise.

The State Consumer Rights Protection Authority and the Insurance Supervisory Commission should be given legal authority to make decisions binding on financial businesses.

At a later stage, consumer protection in insurance should pass from the Insurance Supervisory Commission to the State Consumer Rights Protection Authority (a FIN-NET member).

In the longer term, the State Consumer Rights Protection Authority was likely to become overwhelmed and consideration should be given to establishing a statutory financial ombudsman.

In banking, consumers have free access to the government-appointed State Consumer Rights Protection Authority – which provides mediation, non-binding recommendations and decisions that are binding on both parties. It is a member of FIN-NET, for cross-border disputes.

In insurance, consumers have free access to the government-appointed Insurance Supervisory Commission – which provides mediation and non-binding recommendations. It is not a member of FIN-NET.

As a result of forthcoming changes to the regulatory arrangements, expected in 2012, the arrangements for out-of-court redress may change. But the position has not yet been decided.

As recommended in 2009, if out-of-court redress remains with the State Consumer Rights Protection Authority, it should be given the necessary powers and resources – or consideration should be given to creating a financial ombudsman, which should adopt the standards that would enable it to become a member of FIN-NET.

Poland

The World Bank has not previously reviewed the financial ombudsman/ADR position in Poland.

In banking, consumers have access to the industry-appointed Banking Ombudsman, which provides a decision that binds the financial business but not the consumer. Consumers must pay a fee of €12.50, which is refunded if they win.

In insurance, consumers have free access to the government-appointed Insurance Ombudsman, which provides a non-binding recommendation – with the possibility, at some cost, of going on to arbitration.

14 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/Lithuania_CP_Vol1_En.pdf



In both banking and insurance, consumers have the alternative of access to the Arbitration Court at the Financial Supervisory Authority, which provides mediation and decisions binding on both parties. Consumers must pay a fee of €62.00, which is refunded if they win.

The Banking Ombudsman, Insurance Ombudsman and Arbitration Court at the Financial Supervisory Authority are all members of FIN-NET to handle cross-border disputes.

Romania


The Diagnostic Review of Consumer Protection and Financial Literacy in Romania15 recommended:

A financial ombudsman or other similar procedure should be put in place, and should become a member of FIN-NET.

As a first step, ombudsmen could be established by the professional associations. If this did not prove sufficiently effective, consideration should be given to establishing an ombudsman by law.

A Special Projects Initiative was established with support from The World Bank which, amongst other things, produced proposals for a financial ombudsman.

In banking, the National Bank of Romania provides a non-binding recommendation in disputes about cross-border transfers.

The banking ombudsman proposed by the Special Projects Initiative has not been established.

Consumers have access to the Union of Banking Mediators and the Association of Mediators in the Financial-Banking Field – FINBAN, but they both charge consumers a non-returnable fee and provide only mediation.

In insurance, there is the industry-appointed Insurance Arbitration Commission – but this charges consumers a non-returnable fee, provides only mediation and focuses on business-to-business disputes.

None of these bodies is a member of FIN-NET to cover cross-border complaints – though the Union of Banking Mediators has put itself forward as a candidate and the Association of Mediators in the Financial-Banking Field – FINBAN says it plans to apply.


Slovakia

The World Bank previously reviewed the financial ombudsman/ADR position in Slovakia in 2007.

The Technical Note on Consumer Protection in Financial Services in Slovakia16 recommended that a financial ombudsman should be created, and should join FIN-NET.

15 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/RO_-_CPFL_Vol_I.pdf16 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/SkCPFSVolIMainReport.pdf




In banking, at present consumers have free access to the industry-appointed Banking Ombudsman –which provides mediation and a non-binding recommendation, if the financial business is a member of the bankers association.

In insurance, there is no financial ombudsman/ADR.

Slovakia has no member of FIN-NET to handle cross-border complaints.

As recommended in 2007, Slovakia should have a financial ombudsman – which should not be restricted to banking and which should adopt the standards that will enable it to become a member of FIN-NET.

Slovenia

The World Bank has not previously reviewed the financial ombudsman/ADR position in Slovenia.

In banking, consumers have free access to the Banking Settlement Council, appointed by a body where half of the members come from the financial industry. It provides a non-binding recommendation.

In insurance, consumers have free access to the industry-appointed Mediation Centre (providing mediation in damages claims) and Insurance Ombudsman (providing non-binding recommendations on breaches of the insurance code or good insurance practice, but not damages claims).

Slovenia does not have a member of FIN-NET to handle cross-border complaints.

The Banking Settlement Council, Insurance Mediation Centre and Insurance Ombudsmen have not demonstrated that they comply with Commission Recommendation 1998/257/EC.

They should adopt the standards that will enable them to become members of FIN-NET (and should use the opportunity of adopting best practice from amongst their FIN-NET colleagues) or consideration should be given to establishing a financial ombudsman by law.


Preface

Consumer conditions compared

This chapter shows that: consumer confidence in the CEE 10 is below average; and consumers and businesses throughout the EU find it easier to resolve disputes through ombudsmen and other ADRs rather than through the courts.

The information in this chapter is from the European Consumer Conditions Scoreboard (fifth edition, published March 2011)17 and relates to all sectors, not just financial services. The European Commission publishes comparative details of conditions in the EU member states, in order to:

identify whether markets are working for consumers; track the integration of the retail single market; and monitor national consumer conditions.

Consumer conditions index

The information collected is collated into a consumer conditions index, to help estimate the impact of policies on the welfare of consumers. The latest index is for 2010. The percentage scores (against a potential maximum of 100%) were –

United Kingdom 74% Hungary 57%Ireland 72% Portugal 57%Luxembourg 70% Poland 55%Austria 67% Slovenia 54%Finland 66% Latvia 54%Netherlands 66% Estonia 54%Italy 66% Cyprus 54%Germany 65% Spain 53%Denmark 63% Slovakia 53%Sweden 62% Czech Republic 52%Belgium 61% Lithuania 49%EU average 61% Greece 48%France 59% Romania 46%Malta 58% Bulgaria 42%

The scoreboard shows that the consumer conditions index scores for all of the CEE 10 countries fall below the average across the EU.

Confidence in consumer protection

The statistics from which the consumer conditions index is calculated include the percentage of consumers who: 17 http://ec.europa.eu/consumers/strategy/docs/5th_edition_scoreboard_en.pdf

http://ec.europa.eu/consumers/strategy/docs/


feel adequately protected by existing consumer-protection measures: and felt they had a reason to complain but did not complain:

The percentage scores (against a potential maximum of 100%) were –

Consumers who feel adequately protected by existing consumer protection measures:

Consumers who felt they had a reason to complain but did not complain:

United Kingdom 80% Austria 5%Austria 79% Luxembourg 6%Ireland 79% Denmark 9%Denmark 72% Sweden 10%Luxembourg 71% Germany 11%Germany 69% Italy 13%Netherlands 69% Netherlands 13%Finland 68% Belgium 16%Italy 61% Portugal 16%Sweden 61% Malta 17%EU average 57% United Kingdom 17%Belgium 53% Spain 18%Portugal 53% Finland 20%Hungary 51% France 20%Slovakia 51% Slovenia 22%Malta 49% Ireland 23%Poland 49% EU average 23%Czech Republic 47% Greece 25%France 47% Cyprus 26%Cyprus 44% Czech Republic 32%Spain 44% Hungary 32%Estonia 43% Slovakia 38%Slovenia 39% Poland 40%Latvia 38% Lithuania 43%Romania 34% Latvia 50%Lithuania 33% Bulgaria 52%Greece 30% Estonia 55%Bulgaria 27% Romania 57%

80% of consumers in the UK feel adequately protected. The average across the EU is 57%. But consumers in the CEE 10 feel less well protected – suggesting that much remains to be done to increase their confidence.

All the CEE 10 are below the EU average. Poland, Czech Republic and Estonia are below 50%. Slovenia, Latvia, Romania and Lithuania are below 40%. Bulgaria is below 30%.


Consumers in the CEE 10, apart from those in Slovenia, are also less likely to complain if something goes wrong. Presumably this reflects, amongst other things, a lower level of confidence that any complaint they made would be satisfactorily resolved.

Confidence in ADRs and the courts

The statistics also show how easy consumers find it to resolve disputes with sellers/suppliers through ADRs or through the courts. The percentage scores (against a potential maximum of 100%) were –

Consumers finding it easy to resolve disputes with sellers/providers through ADRs:

Consumers finding it easy to resolve disputes with sellers/ providers through the courts:

Ireland 68% United Kingdom 51%United Kingdom 67% Ireland 49%Cyprus 61% Germany 40%Austria 57% Austria 39%Finland 55% France 36%Netherlands 51% Italy 35%France 52% Luxembourg 35%Germany 52% Greece 34%Luxembourg 52% Netherlands 34%Greece 48% EU average 33%EU average 48% Belgium 30%Hungary 46% Denmark 29%Italy 46% Finland 28%Romania 44% Romania 28%Poland 43% Spain 25%Belgium 40% Poland 21%Spain 38% Czech Republic 20%Denmark 37% Malta 20%Malta 34% Sweden 20%Sweden 34% Lithuania 18%Lithuania 33% Cyprus 19%Portugal 32% Bulgaria 19%Slovenia 32% Latvia 19%Czech Republic 28% Estonia 16%Estonia 27% Slovakia 16%Slovakia 25% Portugal 15%Latvia 24% Slovenia 15%Bulgaria 23% Hungary 9%

The scoreboard shows that consumers in all the CEE 10 countries find is less easy than the EU average to resolve disputes with sellers/providers either through ADR or through the courts.


But it is notable that in every EU member state consumers find it easier to resolve disputes with sellers/providers through ADR than through the courts (irrespective of consumers’ varying levels of confidence in their national courts).

Additionally, figure 40 on page 44 of the European Consumer Conditions Scoreboard shows that retailers in every EU member state also prefer ADRs to the courts as a redress mechanism for disputes with consumers.

This suggests that, in the CEE 10, increasing consumer access to adequate and effective ADRs – such as ombudsmen – has a key role to play in increasing the current below-average levels of consumer confidence in various sectors, including financial services.


BulgariaБългария

Basic information

Bulgaria joined the European Union in 2007. It currently retains its national currency, with a fixed exchange rate to the Euro.

It has a population of about 7.6 million. Access to financial services in 2007 was 56%, compared to an average of 91% in western Europe.18

Domestic credit provided by the banking sector in 2009 was 69.4% of GDP (compared to 157.9% for the EU as a whole).19

Information from the European Consumer Conditions Scoreboard (fifth edition, published March 2011) includes:

consumer conditions index score 42% consumer confidence in existing consumer protection measures 27% consumers who had a reason to complain but did not complain 52% ease of consumers resolving disputes with sellers/ suppliers through ADRs 23% ease of consumers resolving disputes with sellers/ suppliers through courts 19%

Any previous report on resolving financial disputes

The World Bank’s 2009 Diagnostic Review of Consumer Protection and Financial Capability in Bulgaria20 noted:

Consumer confidence was low compared to elsewhere in the EU. A survey on consumer protection in financial services was needed.

56% of consumers had an account with a financial business. 33% had a debit card and 9% had a credit card. 46% of household savings were in Euros.

Households had increasingly borrowed in foreign currency, mainly in Euros – with borrowing in foreign currency nearing 30% by the end of 2008.

The Consumer Protection Act (revised 2007) specified that consumers should have access to both judicial and out-of-court procedures for resolution of consumer disputes.

The constitution of Bulgaria restricted to the courts the power to make final legally-binding decisions.

Existing conciliation committees would not act if either party declined to attend. The average time for a case to be heard in court was five years, even with simple cases.

This meant that there was no effective mechanism for dispute settlement in issues related to financial services, limiting the conditions for a healthy financial market.

18 http://siteresources.worldbank.org/INTFINFORALL/Resources/4099583-1194373512632/FFA_book.pdf - pages 190/19119 http://data.worldbank.org/indicator/FS.AST.DOMS.GD.ZS 20 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/RO_-_CPFL_Vol_I.pdf


http://data.world

http://siteresources.worl


Recommendations included:

Consumer protection legislation for all financial services should be covered by the Commission for Consumer Protection (within the Ministry of Economy and Energy).

All financial businesses should be obliged to establish a clear process by which consumers couldsubmit disputes – which should be noted in all contracts.

Consideration should be given to a financial ombudsman as a long-term solution, replacing the existing conciliation committees.

Creation of a financial ombudsman would take time, but it could have the most favourable long-term impact on financial consumer protection.

There were advantages and disadvantages to whether the ombudsman was established by the professional associations or as an independent authority established by law.

Bulgaria should join FIN-NET, the network of out-of-court schemes in the EEA responsible for handling disputes between consumers and financial businesses.

Current financial ombudsman/ADR schemes

The Law on Consumer Protection established regional conciliation commissions for out-of-court settlement of consumer disputes. The system is managed by the Commission for Consumer Protection – which is a collegiate authority under the Minister of Economy, Energy and Tourism.21

Conciliation commissions consist of three members – one appointed by the Commission on Consumer Protection, one professional and one consumer representative. The conciliation is not binding on the parties.

The National Bank of Bulgaria says that the only out-of-court redress scheme in financial services is the Conciliation Committee for Payment Disputes (Помирителна комисия за платежни спорове). The Committee was established, under article 128 of the Law on Payment Services and Payment Systems, as part of the Commission for Consumer Protection.

Article 185 of the Insurance Code requires an insurer, before concluding an insurance contract, to provide written information which includes details of any procedures for out-of-court settlement of disputes – but there is currently no ombudsman/ADR that covers insurance.

The table at the end of this chapter gives fuller information on the Conciliation Committee for Payment Disputes. It is not a member of FIN-NET.

Conclusions

Consumers have free access to the legally-established Conciliation Commission for Payment Disputes, which provides non-binding recommendations in disputes about credit cards, loans, payment services and electronic money.

There is no financial ombudsman or financial ADR for other aspects of banking or for any aspects of insurance or other financial products. Bulgaria has no member of FIN-NET to handle cross-border cases.

21 http://ec.europa.eu/consumers/overview/country_profile/BG_web_country_profile.pdf

http://ec.europa.eu/consumers/overview/country_profile/BG_we


Conciliation Committee for Payment Disputes (Bulgaria)Name, in national language Помирителна комисия за платежни споровеName, in English Conciliation commission for payment disputesWebsite address www.kzp.bgE-mail address for enquiries Not availablePhone number + 359 2 933 0577 or + 359 2 914 51277Fax number + 359 2 988 4218Address Sofia 1000, 4a Slaveikov SquareStatus / governanceType of ADR scheme Part of government consumer protection bodyStatus Established by lawDecision maker Panel of five (appointed by):

Chairman (Director of Bulgarian National Bank) 2 members (association of commercial banks) 2 members (Commission on Trade and Consumer Protection)

Funding from GovernmentIs the ADR a member of FIN-NET?

No

If the ADR is not a member of FIN-NET, say why

No reason given

Complaints / outcomesTakes complaints from Consumers

Micro-enterprises (EU definition) Small and medium enterprises (EU definition) Larger businesses

Must they complain to financial business first?

Yes

Maximum time limit for financial business to respond

Time limit = 7 days

Must financial business tell complainants about the ADR?

Yes (article 68 of the Funds Transfers, Electronic Payment Instruments and Payment Systems Act)

Must complainants pay a fee? NoTypes of resolution provided Recommendation, not binding on either party Maximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredCredit cards and loans All banks in country, both national and foreign-ownedPayment services All banks in country, both national and foreign-ownedElectronic money All banks in country, both national and foreign-owned

www.kzp.


CroatiaHrvatska

Basic information

Croatia is on track to become a member of the European Union, having signed an accession treaty in November 2011. It retains its national currency, with a floating exchange rate to the Euro.

It has a population of about 4.4 million. Access to financial services in 2007 was 42%, compared to an average of 91% in western Europe.


As Croatia is not yet an EU member, it is not yet covered by the European Consumer Conditions Scoreboard.


The World Bank’s 2010 Diagnostic Review of Consumer Protection and Financial Literacy in Croatia23

noted:

There was no national consumer protection agency that covered all sectors, and consumer protection responsibility was not assigned to the financial regulators.

Household debt had been increasing, but lay within the range found in the EU member states that joined in 2004/2007.

The Credit Institutions Act and Consumer Protection Act both required extensive information to be provided to financial consumers.

The Consumer Credit Act had clarified and harmonised the definition of the annual percentage rate for loans, effective from January 2011.

But complaints by consumers about banks unilaterally changing interest rates were common, according to the Ministry of Finance.

‘Bundling’ of financial products (where a consumer taking one product is tied to taking one or more linked products) was much more extensive than the norm in the EU.

The greatest weakness was the mechanism for resolving disputes. Consumers could apply to any one of nine different institutions – but none was responsible for finding a solution.


Financial businesses should strengthen their internal procedures to handle complaints from retail customers.

Codes of conduct or consumer protection codes should provide guidance on how financial businesses should deal with complaints.

22 http://data.worldbank.org/indicator/FS.AST.DOMS.GD.ZS 23 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/Croatia_CPFL_Vol1_English.pdf

http://data.world

http://siteresourc


The Croatian Banking Association’s code of banking practices should be strengthened and made into a consumer protection code.

The proposed mediation centre for the banking sector was not likely to be successful. The Insurance Bureau’s mediation centre had been more effective, and had generated respect.

Consideration should be given to establishing a financial ombudsman – and whether that should be through the professional associations or established by law.

A start could be for the Banking Association to establish an ombudsman with a governance structure like that of the Insurance Bureau’s mediation service.

The Insurance Bureau’s mediation service should extend its role to cover complaints about securities and pensions also.

Establishing a Financial Consumer Complaints Centre would give consumers a single point for enquiries and complaints.

But the most efficient approach would be to set up a single dispute-resolution mechanism for the entire financial sector.


It is still the case that there is no single consumer protection agency and no central point for complaints against financial businesses.

There is a very wide range of institutions involved in this sector of the market, including the:

Consumer Protection Department of the Ministry of Economy, Labour and Entrepreneurship (Ministarstvo gospodarstva, rada i poduzetništva);

State Inspectorate of the Republic of Croatia (Državni inspektorat Republike Hrvatske);

Croatian Financial Services Supervisory Agency(Hrvatska Agencija za nadzor Financijskih usluga);

Croatian National Bank(Hrvatska Narodna Banka);

State Agency for Deposit Insurance and Bank Rehabilitation(Državna Agencija za osiguranje štednih uloga i sanaciju banaka); and

Central Depositary and Clearing Company [dealing with disputes from the Zagreb Stock Exchange](Središnje klirinško depozitarno društvo d.d.).

The Croatian Chamber of Economy has a:

Mediation Centre (Centar za mirenje pri Hrvatskoj gospodarskoj komori); Court of Honour (Sud časti pri Hrvatskoj gospodarskoj komori); and Permanent Arbitration Court (Stalno izbrano sudište pri Hrvatskoj gospodarskoj komori).

The banking industry association relies on a mediation centre within the employers’ association. Only mediation is provided, and consumers normally have to pay a fee (though this is waived until the end of 2011).

The insurance industry association has both a mediation centre (providing mediation to both consumers and businesses) and an ombudsman (providing non-binding recommendations, limited to complaints by consumers relating to the insurance code of ethics).


The table at the end of this chapter gives fuller information on the:

Banking Mediation Centre (Centar za mirenje u bankarstvu pri Centru za mirenje Hrvatske udruge poslodavaca);

Insurance Mediation Centre(Centar za mirenje - Hrvatski ured za osiguranje);

Insurance Ombudsman(Pravobranitelj za područje osiguranja - Hrvatski ured za osiguranje); and

Mediation Centre at the Chamber of Economy (Centar za mirenje pri Hrvatskoj gospodarskoj komori).

Croatia has not yet joined the European Union; so none of these is yet eligible to apply for membership of FIN-NET. The Chamber of Economy was accepted as an observer at FIN-NET meetings in October 2011.

Conclusions

In banking, all that is available to consumers is mediation. Consumers have to pay a fee for that (though the fee was being waived until the end of 2011).

In insurance, consumers have free access to mediation, or to an industry-appointed ombudsman who can provide a non-binding recommendation limited to complaints about the insurance code of ethics.

Croatia in not yet a member of the European Union. It is not eligible to join FIN-NET for cross-border disputes, but the Chamber of Economy was accepted as a FIN-NET observer in October 2011.

As recommended in 2010, consideration should be given to establishing a financial ombudsman –which should adopt the standards that will enable it to become a member of FIN-NET.


Banking Mediation Centre (Croatia)Name, in national language Centar za mirenje u bankarstvu pri Centru za mirenje Hrvatske udruge

poslodavacaName, in English Centre for Mediation in Banking at the Centre for Mediation of the Croatian

Employers' AssociationWebsite address www.hup.hr Centar za mirenjeE-mail address for enquiries [email protected] number +385 1 4897 557Fax number +385 1 4897 583Address Hrvatska udruga poslodavaca,

Pavla Hatza 12, HR-10000 ZagrebStatus / governanceType of ADR scheme Mediation scheme within employers’ association and in cooperation with the

banking industry associationStatus Private, voluntaryDecision maker appointed by Agreed case-by-case by the partiesFunding from Case fees paid by industry

Case fees paid by complainants (fees waived for individual consumers to the end of 2011)

Is the ADR a member of FIN-NET? NoIf the ADR is not a member of FIN-NET, say why

Croatia is not yet a member of the EU




No


No time limit


No

Must complainants pay a fee? Yes (not refunded); fee depends on amount of claim(fees waived for individual consumers to the end of 2011)

Types of resolution provided MediationMaximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredDeposits All banks in country, both national and foreign-owned

all credit unions in country all other types of financial business in country

Credit cards and loans All banks in country, both national and foreign-owned all credit unions in country all other types of financial business in country all intermediaries in country

Mortgages All banks in country, both national and foreign-owned all credit unions in country all other types of financial business in country all intermediaries in country

Payment services All banks in country, both national and foreign-owned all other types of financial business in country

Electronic money All banks in country, both national and foreign-owned all other types of financial business in country

Non-life insurance All insurers in country, both national and foreign-owned all intermediaries in country

Life insurance All insurers in country, both national and foreign-owned all intermediaries in country

Packaged investments All providers in country, both national and foreign-owned all intermediaries in country

Company stocks and shares All companies in country, both national and foreign-owned all intermediaries in country

www.hup.hr


Insurance Mediation Centre (Croatia)Name, in national language Centar za mirenje - Hrvatski ured za osiguranjeName, in English Insurance Mediation Centre - Croatian Insurance BureauWebsite address www.huo.hr/mirenje_frame.phpE-mail address for enquiries [email protected] number + 385 1 4696 600Fax number + 385 1 4696 664Address Martićeva 73, HR - 10000 ZagrebStatus / governanceType of ADR scheme Part of industry associationStatus Based on the Law on InsuranceDecision maker appointed by Body with majority of members from the financial industryFunding from Levy and case fees paid by the industryIs the ADR a member of FIN-NET?

No


Croatia is not yet a member of the EU.




Yes


No time limit


Yes

Must complainants pay a fee? NoTypes of resolution provided MediationMaximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredNon-life insurance All authorised:

insurers in country, both national and foreign-owned intermediaries

Life insurance All authorised: insurers in country, both national and foreign-owned intermediaries

www.huo.hr/mirenje_frame.php


Insurance Ombudsman (Croatia)Name, in national language Pravobranitelj za područje osiguranja - Hrvatski ured za osiguranje Name, in English Insurance Ombudsman - Croatian Insurance BureauWebsite address www.huo.hr/index.phpE-mail address for enquiries [email protected] number + 385 1 4696 636Fax number + 385 1 4696 660Address Martićeva 73, HR - 10000 ZagrebStatus / governanceType of ADR scheme Part of industry associationStatus Based on the Law on InsuranceDecision maker appointed by Body with majority of members from the financial industryFunding from Levy paid by the industryIs the ADR a member of FIN-NET?

No


Croatia is not yet a member of the EU.

Complaints / outcomesTakes complaints from ConsumersMust they complain to financial business first?

Yes


No time limit (but usually within 30 days)


Yes

Must complainants pay a fee? NoTypes of resolution provided Recommendation, not binding on either party – and limited to

complaints relating to the insurance code of ethicsMaximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredNon-life insurance All authorised:

insurers in country, both national and foreign-owned intermediaries

Life insurance All authorised: insurers in country, both national and foreign-owned intermediaries

www.huo.hr/index.php


Mediation Centre at the Chamber of Economy (Croatia)Name, in national language Centar za mirenje pri Hrvatskoj gospodarskoj komoriName, in English Mediation Centre at the Croatian Chamber of Economy Website address www.hgk.hrE-mail address for enquiries [email protected] number + 385 1 48 48 622 Fax number + 385 1 48 48 625Address Roosveltov trg 2, 10 000 ZagrebStatus / governanceType of ADR scheme Professional and business associationStatus Established by lawDecision maker appointed by Croatian Chamber of EconomyFunding from Government and European Union PHARE projectIs the ADR a member of FIN-NET? NoIf the ADR is not a member of FIN-NET, say why

Croatia is not yet a member of the EU


Micro-enterprises (EU definition) Small and medium enterprises (EU definition)


No


No time limit


No

Must complainants pay a fee? Yes (not refunded); fee = €150Types of resolution provided MediationMaximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredDeposits All banks in country, both national and foreign-owned










www.hgk.hr


Czech RepublicČeská Republika

Basic information

The Czech Republic joined the European Union in 2004. It currently retains its national currency, witha floating exchange rate to Euro.






The World Bank’s 2007 Technical Note on Consumer Protection in Financial Services in the Czech Republic25 noted:

Supervision of banking, insurance and securities had been consolidated in the Czech National Bank.

But supervision of other providers of consumer credit lay with the Czech Trade Inspection, which lacked expertise in financial issues.

Consumers deciding to pay off loans earlier than originally agreed in the loan contract discovered prepayment penalties of up to 100% of the amount of the loan.

Advice from distribution agents was skewed by widely differing commissions and there were insufficient rules to prevent churning of insurance products.

The Czech Bankers Association had adopted a Banking Activities Standard and also the EU Code of Conduct in Mortgage Lending.

But the Banking Activities Standard was not mandatory for member banks, and the Czech Bankers Association had no enforcement powers.

The Association of Funds and Asset Management had extensive disclosure and conduct rules (enforceable on its members) and a powerful ethics committee.

24 http://data.worldbank.org/indicator/FS.AST.DOMS.GD.ZS 25 http://siteresources.worldbank.org/EXTECAREGTOPPRVSECDEV/Resources/CR_CPFS_12June07.pdf

http://data.world



A Financial Arbiter had been created - appointed by, and reporting to, the Chamber of Deputies –and had joined FIN-NET.

But the Arbiter’s jurisdiction remained limited, covering only electronic payments in the banking sector.

The Arbiter’s independence was constrained because it had no budget, depending on the willingness of the Czech National Bank to cover its expenses.


The supervisory responsibilities of the Trade Inspection in respect of consumer credit should be transferred to the National Bank.

The truthfulness and accuracy of advertising and information disclosure (before, during and after the point of sale) should be improved.

New rules were required on the knowledge and ethics of distributors of financial products, and cooling-off periods should be introduced for some products.

The Financial Arbiter should be converted into a financial ombudsman (perhaps on the UK model), with a comprehensive jurisdiction covering all areas of the financial sector.

The arbiter/ombudsman should have an independent budget, financed by the financial businesses in its jurisdiction.

The arbiter/ombudsman would also benefit from the establishment of a governing board toensure its independent governance and accountability.


The only ombudsman or ADR for financial services in the Czech Republic is the Financial Arbiter(Finanční arbitr České republiky). The Arbiter has seen a number of changes:

After The World Bank’s 2007 report, the Arbiter’s jurisdiction was extended to cover most banking services.

A new law, which came into force in July 2011, made further changes. Under this law:- the Arbiter and deputy are appointed by the government, instead of the Chamber of Deputies;- funding is within the Ministry of Finance’s budget, instead of the Czech National Bank; and- the Arbiter’s jurisdiction was extended to cover consumer credit and some investments.26

The Ministry of Finance has proposed a further change, under which the Arbiter’s jurisdiction would be extended in 2012 to cover insurance, and investments covered by the European Markets in Financial Instruments Directive.

The table at the end of this chapter gives fuller information on the Financial Arbiter. It is a member of FIN-NET.

Conclusions

In banking, consumers have free access to the legally-established Financial Arbiter – which covers payment services and (since July 2011) consumer credit and some investment products. The Arbiter provides mediation and decisions binding on the financial business and consumer.

26 The Arbiter covers collective investment products such as UCITS (an EU-defined collective investment) and unit trusts sold to

the public. The Arbiter does not yet cover other packaged retail investment products.


In insurance, there is currently no financial ombudsman/ADR – but it is hoped that the Financial Arbiter’s jurisdiction will be extended to insurance, and additional investment products.

The Financial Arbiter is a member of FIN-NET to cover cross-border cases.

Consideration should be given to continuing to extend the Financial Arbiter’s jurisdiction until it covers all areas of the financial sector, as recommended in 2007.


Financial Arbiter (Czech Republic) following the July 2011 changesName, in national language Finanční arbitr České republikyName, in English Financial Arbiter of the Czech RepublicWebsite address www.financniarbitr.czE-mail address for enquiries [email protected] number + 420 257 042 094Fax number + 420 221 674 666Address Legerova 1581/69, 110 00 Praha 1Status / governanceType of ombudsman scheme Legally separate ombudsman schemeStatus Established by lawOmbudsman appointed by GovernmentFunding from State Budget, through Ministry of FinanceIs the ombudsman scheme a member of FIN-NET?

Yes

Complaints / outcomesTakes complaints from Consumers onlyMust they complain to financial business first?

Yes


Time limit = 30 days (60 days in complex cases)

Must business tell complainants about ombudsman?

Yes

Must complainants pay a fee? NoTypes of resolution provided Mediation; failing which

decision – binding on both financial business and consumer Maximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredDeposits All banks in country, both national and foreign-owned


Credit cards and loans All banks in country, both national and foreign-owned all credit unions in country all other types of types of financial business all intermediaries in country

Mortgages NonePayment services All banks in country, both national and foreign-owned

all other types of financial business in countryElectronic money All banks in country, both national and foreign-owned

all other types of financial business in countryNon-life insurance None [but may be covered in 2012]Life insurance None [but may be covered in 2012]Investments27 All providers in country, both national and foreign-owned

all intermediaries in country

27 The Arbiter covers only collective investment products such as UCITS (an EU-defined collective investment) and unit trusts

sold to the public. The Arbiter does not yet cover other packaged retail investment products, but these may be covered in 2012.

www.financniar


EstoniaEesti

Basic information

Estonia joined the European Union in 2004. It adopted the Euro in 2011.


Domestic credit provided by the banking sector in 2009 was 106.2% of GDP (compared to 157.9% for the EU as a whole). 28




This is the first report from The World Bank regarding this topic in Estonia.


The Consumer Protection Board (Tarbijakaitseamet) is the national authority for consumer protection, including: supervising the consumer market; informing and advising consumers; and settling consumer complaints.

The Consumer Complaint Committee (Tarbijakaebuste Komisjoni) is an independent institution, under the Consumer Protection Act, and operates out of the Consumer Protection Board to settle disputes between consumers and sellers/providers.

The Committee sits in panels comprising a chairman (an expert in consumer law) and an equalnumber of consumer and business representatives. All decisions of the committee are published on the Consumer Protection Board’s website.

The consumer must first have complained to the business and the amount in dispute must be at least €20. The Committee’s decision is not binding. If the business does not comply, the ConsumerProtection Board can, with the consumer’s consent, take the case to court.

28 http://data.worldbank.org/indicator/FS.AST.DOMS.GD.ZS

http://data.world


The Insurance Conciliation Body (Kindlustuse lepitusorgan) covers insurers and insurance intermediaries. It seeks to resolve complaints by mediation or recommendation. The industry chooses a panel of conciliators, and the complainant selects a conciliator from the panel.

The table at the end of this chapter gives fuller information on the:

Consumer Complaint Committee; and Insurance Conciliation Body.

The Consumer Complaint Committee is a member of FIN-NET.

Conclusions

In both banking and insurance, consumers have free access to the legally-established Consumer Complaint Committee (provided the claim is for at least €20). The Committee provides a non-binding recommendation, and is a member of FIN-NET.

In insurance, consumers have the alternative of free access to the industry-appointed Insurance Conciliation Body, which provides mediation or a non-binding recommendation. It is not a member of FIN-NET.


Consumer Complaint Committee (Estonia)Name, in national language Tarbijakaebuste komisjonName, in English Consumer Complaint CommitteeWebsite address www.tarbijakaitseamet.ee/index.php?id=1570E-mail address for enquiries [email protected] number +372 6 201 700Fax number + 372 6 201 701Address Rahukohtu 2, Tallinn 10130Status / governanceType of ADR scheme Part of government consumer protection bodyStatus Public, established by lawDecision maker appointed by Chairmen are appointed jointly by the Minister of Justice and the

Minister of Finance and CommunicationFunding from GovernmentIs ADR a member of FIN-NET? YesComplaints / outcomesTakes complaints from ConsumersMust they complain to financial business first?

Yes


Time limit = 15 days


No

Must complainants pay a fee? NoTypes of resolution provided Recommendation, not binding on either partyMaximum that can be awarded No maximum amountMinimum that can be claimed Minimum that can be claimed = € 20Products / types of business coveredDeposits All banks in country, both national and foreign-owned










www.tar


Insurance Conciliation Body (Estonia)Name, in national language Kindlustuse lepitusorganName, in English Insurance Conciliation BodyWebsite address www.eksl.ee LepitusorganE-mail address for enquiries [email protected] number + 372 667 1800Fax numberAddress Mustamäe tee 44, Tallinn 10621Status / governanceType of ADR scheme Part of industry associationStatus PrivateDecision maker appointed by A body with a majority of members from the financial industry

chooses a panel of 11 members. The complainant chooses one from that panel.

Funding from Case fees paid by industryIs ADR a member of FIN-NET? NoIf the ADR is not a member of FIN-NET, say why

Other things take priority at present




Yes


They must respond within a reasonable time


Yes

Must complainants pay a fee? NoTypes of resolution provided Mediation

Recommendation, not binding on either partyMaximum that can be awarded Maximum that can be awarded = €350,000 Minimum that can be claimed No minimum amountProducts / types of business coveredNon-life insurance All insurers in country, both national and foreign-owned*

members of the only insurer association all intermediaries in country[* all are members of the Estonian Insurance Association]

Life insurance All insurers in country, both national and foreign-owned* members of the only insurer association all intermediaries in country[* all are members of the Estonian Insurance Association]

www.eksl.ee


HungaryMagyarország

Basic information

Hungary joined the European Union in 2004. It currently retains its national currency with a floating exchange rate to the Euro.

It has a population of about 10 million. Access to financial services in 2007 was 66%, compared to an average of 91% in western Europe.





This is the first report from The World Bank regarding this topic in Hungary.


From 1 July 2011 the Financial Arbitration Board (Pénzügyi Békéltető Testület), established by law, took over out-of-court settlement of disputes relating to contracts between consumers and financial businesses. Its President is appointed by the Financial Supervisory Authority.

The Financial Arbitration Board covers all financial businesses supervised by the Financial Supervisory Authority – including banks, insurers, mortgage-lenders, voluntary private pension funds, occupational pension funds, voluntary mutual funds, capital market institutions, and intermediaries.

If a financial business rejects a complaint from a consumer, it is required to inform the consumer of the existence of the Financial Arbitration Board. The Board provides mediation and non-binding recommendations. If both parties agree in advance, it will provide a decision binding both parties.

The table at the end of this chapter gives fuller information on the Financial Arbitration Board, which is a member of FIN-NET.

Before 1 July 2011 disputes between consumers and financial businesses could be considered by arbitration boards (Békéltet testület) set up by the state. The Arbitration Board of Budapest


http://data.world


(Budapesti Békéltető Testület) was a member of FIN-NET, in order to provide a link with financial ombudsmen/ADRs elsewhere in the European Union for cross-border cases. But these arrangements have been superseded by the Financial Arbitration Board.

Conclusions

Both banking and insurance, as well as other financial services, have been covered by the Financial Arbitration Board since 1 July 2011.

This was established by law and is run by the Hungarian Financial Supervisory Authority. It is a member of FIN-NET.

It provides free access to consumers. It offers mediation, a non-binding recommendation and (if both parties agree in advance) a decision that is binding on both parties.


Financial Arbitration Board (Hungary)Name, in national language Pénzügyi Békéltető TestületName, in English Financial Arbitration BoardWebsite address www.pszaf.hu/pbtE-mail address for enquiries [email protected] number + 36 1 489 91 00Fax number + 36 1 489 91 02Address 39 Krisztina krt., Budapest, H-1013Status / governanceType of ADR scheme Independent body

run by the Hungarian Financial Supervisory AuthorityStatus Public, established by lawDecision-maker appointed by RegulatorFunding from Regulatory budget of the stateIs ADR a member of FIN-NET? YesComplaints / outcomesTakes complaints from ConsumersMust they complain to financial business first?

Yes




Yes


Recommendation, not binding on either party Decision – binding on both financial business and consumer,

if they agree that in advance Maximum that can be awarded No maximum limitMinimum that can be claimed No minimum amountProducts / types of business coveredDeposits All banks in country, both national and foreign-owned

all credit unions in country all other businesses in country

Credit cards and loans All banks in country, both national and foreign-owned all credit unions in country all other businesses in country

Mortgages All banks in country, both national and foreign-owned all other businesses in country[Independent mortgage intermediaries not allowed in Hungary]

Payment services All banks in country, both national and foreign-owned all other businesses in country

Electronic money No institution has yet applied to issue electronic moneyNon-life insurance All insurers in country, both national and foreign-owned

all independent intermediariesLife insurance All insurers in country, both national and foreign-owned

all independent intermediariesPackaged investments All providers in country, both national and foreign-owned

[Independent investment intermediaries not allowed in Hungary]Company stocks and shares None

www.pszaf.hu/p


LatviaLatvija

Basic information

Latvia joined the European Union in 2004. It currently retains its national currency, but with a fixed exchange rate to the Euro.






A 2009 study by one of the authors of this report, as part of an EU assistance programme, noted:

Significant parts of the industry were owned by businesses from Finland, Denmark, Sweden and Germany.

Latvian law on unfair contract terms provided greater protection than the current European directive.

Despite this, some foreign-owned mortgage lenders had tried to apply (arguably unfair) penalty charges and interest-rate adjustments out of line with general movements in interest rates.

Additionally, some mortgage lenders had required consumers to provide additional security for their loan, failing which they had been told that they would have to repay the debt in full.

There was some way to go in convincing government and industry stakeholders of the importance of consumer protection and redress in financial services and consumer credit.

There was no licensing for consumer credit activities such as credit-reference agencies, debt-collection agencies and debt-advisory services.

The Ministry of Justice was likely to be sympathetic to out-of-court redress for financial services and consumer credit because of the current workload of the courts.

The industry-sponsored banking ombudsman and the industry-sponsored insurance ombudsman were not greatly used by consumers.


http://data.world


Both charged consumers a deposit. This was returnable if their complaint was upheld, but was likely to operate as a barrier to access, especially for smaller disputes.

Neither scheme claimed to comply with European Recommendation 98/257/EC. The banking ombudsman did not cover significant areas, including mortgages.

The European directive on payment services would make the provision of ADR compulsory from 1 November 2009. Current plans envisaged using the existing banking ombudsman.

The Consumer Rights Protection Centre accepted individual consumer complaints, and could take individual or general action as a result.

But its resources for this were limited and were necessarily limited by the public funds which could be made available.

None of the current ADRs in Latvia was a member of FIN-NET – the members of which were required to comply with European Recommendation 98/257/EC.

The World Bank’s 2010 Diagnostic Review of Consumer Protection and Financial Literacy in Latvia31

and 2010 Action Plan on Financial Consumer Protection in Latvia 32 noted:

Households had increasingly borrowed in Euros. By June 2009 over 88% of household loans were not in the national currency.

In addition to mortgages for house purchase, more than 60% of consumer credit was also secured by mortgages over the borrowers’ homes

Private sector surveys showed that Latvian consumers had low levels of confidence in their ability to make sound consumer finance decisions.

The Consumer Rights Protection Centre was the primary enforcement agency for consumer protection in financial services, but lacked technical expertise.

Codes of conduct had been developed by Association of Latvian Commercial Banks, the Insurance association and the Association of Leasing Companies.

The banking and insurance associations had established their own ombudsmen, but these were not seen by consumers as independent and were little-used.

The banking ombudsman dealt only with disputes about electronic payments, and the insurance ombudsman dealt only with disputes about property and motor insurance.

There were no ombudsmen for other banking products, other insurance products or other large sectors of the financial market.


A small steering committee should be established to monitor implementation of the action plan, update it as necessary and coordinate further actions.

Committee members should come from the Ministry of Economy, Consumer Rights Protection Centre, Financial and Capital Market Commission, Bank of Latvia, industry and consumers.

There should be a single code of conduct for each sector, which should be approved by the relevant regulator and contain a mechanism for dealing with breaches of the code.

The industry should develop ‘key facts’ disclosure documents and standardised contractual provisions.

31 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/Latvia_CP_Vol_1_En.pdf 32 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/LV_Action_Plan_ConsultativeDraft.pdf




These should then by approved by the Consumer Rights Protection Centre and the Financial and Capital Market Commission.

All financial businesses should have a unified complaint-handling system, monitored by the Financial and Capital Market Commission.

To protect consumers from abusive practices, debt collectors should be registered and subject to legally-defined ways of operation and supervision.

The Consumer Rights Protection Centre should make sure it is legally equipped to deal with all relevant financial services complaints it receives, proposing legislative change if necessary.

The Consumer Rights Protection Centre should strengthen its interaction with those in the financial sector to increase its expertise.

The Consumer Rights Protection Centre should strengthen its international contacts. Latvia should join FIN-NET.

The Consumer Rights Protection Centre and the Financial and Capital Market Commission should continue their ‘name and shame’ policy, with better use of websites.

By 2012 or 2013, when there is more experience with the other consumer protection activities, consideration should be given to establishing a financial ombudsman by law.

Such an ombudsman (as found in the UK and Ireland) can play a powerful role in dealing with complaints while building consumer confidence in financial services.

Meanwhile, in respect of any industry-specific ombudsmen, the state should focus on ensuring their independence, low cost for consumers and power to bind financial businesses.

In relation to progress on the action plan, the Consumer Rights Protection Centre says:

The steering committee has been established. A law has been adopted on the licensing of non-bank credit institutions. The Centre has been allocated a limited number of staff to deal with the licensing. A draft law on debt collection agencies is in process of adoption. The Centre has had several meetings with the Association of Commercial Banks. There is little progress on improving the independence or scope of the banking ombudsman.


The Consumer Rights Protection Centre (Patērētāju Tiesību Aizsardzības Centrs) is still limited by the resources that are available to it. It is primarily a supervisory institution – rather than a complaints-handler, especially in financial services.

In financial services it does not take decisions on individual cases, though individual complaints may spur more general action in relation to a financial business, which may also result in the resolution of the individual problem.

There is a Banking Ombudsman (Latvijas Komercbanku asociācijas ombuds) and an Insurance Ombudsman (Latvijas Apdrošinātāju asociācija Ombuds). Both of these are based within industryassociations.

They are not widely used and consumers are not convinced of their impartiality. The Consumer Rights Protection Centre has been encouraging the Association of Commercial Banks to improve the banking ombudsman scheme – but without success so far.


The Motor Insurers’ Bureau (Latvijas Transportlīdzekļu apdrošinātāju birojs), which is established by law but forms part of the insurance industry association, handles disputes between third-parties and insurers in relation to motor third-party liability insurance

The tables at the end of this chapter give fuller information on the:

Consumer Rights Protection Centre; Banking Ombudsman; Insurance Ombudsman; and Motor Insurers’ Bureau.

None of the four is a member of FIN-NET. The Latvian government has confirmed to the European Commission that the Consumer Rights Protection Centre complies with Commission Recommendation 98/257/EC, but the Centre says this was primarily in relation to conformity of products.

The Consumer Rights Protection Centre does not consider that, in financial services, it is as prompt as the Recommendation requires – because its actions are subject to appeal to the courts, so that the whole process can take some years.

The Consumer Rights Protection Centre does not consider that it would be a suitable representative for Latvia in FIN-NET, because of its limited role in relation to individual disputes.

It believes that the appropriate way forward is to improve the Banking Ombudsman and Insurance Ombudsman, including ensuring that they comply with Commission Recommendation 98/257/EC, and for those ombudsmen then to join FIN-NET.

Conclusions

The government-appointed Consumer Rights Protection Centre has a very limited role in relation to individual disputes.

In banking and insurance, there are industry-appointed ombudsmen – which provide non-binding recommendations.

But consumers appear to doubt the impartiality of these ombudsmen and seldom use them – and both of them charge consumers a fee (though this is refunded if the consumer wins).

The industry-based Motor Insurers’ Bureau provides non-binding recommendations in disputes between third parties and motor third-party liability insurers.

Latvia has no member of FIN-NET to handle cross-border disputes.

The Consumer Rights Protection Centre complies with Commission Recommendation 1998/257/EC, but does not propose to join FIN-NET – because of the Centre’s limited role in individual disputes.

The banking and insurance ombudsmen have not demonstrated that they comply with Commission Recommendation 1998/257/EC.

The existing banking and insurance ombudsmen should adopt the standards that will enable them to become members of FIN-NET – or as recommended in 2010, consideration should be given to establishing a financial ombudsman by law.


Consumer Rights Protection Centre (Latvia)Name, in national language Patērētāju Tiesību Aizsardzības CentrsName, in English Consumer Rights Protection CentreWebsite address www.ptac.gov.lvE-mail address for enquiries [email protected] number + 371 67 388 624Fax number + 371 67 388 634Address K.Valdemara 157, Riga, LV- 1013Status / governanceType of ADR scheme Part of government consumer protection bodyStatus PublicDecision maker appointed by GovernmentFunding from GovernmentIs the ADR a member of FIN-NET?

No


Does not directly deal with individual disputes

Complaints / outcomesTakes complaints from ConsumersMust complainant complain to financial business first?

Yes


No time limit

Must financial business tell complainants about ADR?

No

Must complainants pay a fee? NoTypes of resolution provided Recommendation, not binding on either party Maximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredDeposits All banks in country, both national and foreign-owned









Company stocks and shares None

www.ptac.gov.lv


Banking Ombudsman (Latvia)Name, in national language Latvijas Komercbanku asociācijas ombudsName, in English Ombudsman of the Association of Commercial Banks of LatviaWebsite address http://www.bankasoc.lvE-mail address for enquiries [email protected] number + 371 67 284 562Fax number + 371 67 828 170Address Perses street 9/11, Riga, LV-1011Status / governanceType of ombudsman scheme Part of industry associationStatus PrivateOmbudsman appointed by President of the Association of Commercial Banks of LatviaFunding from Court of Arbitration of the Association of Commercial Banks of

LatviaIs the ombudsman scheme a member of FIN-NET?

No

If the ombudsman scheme is not a member of FIN-NET, say why

Too few complaints, and none cross-border yet Does not comply with Recommendation 98/257/EC




Yes



Must financial business tell complainants about ombudsman?

No

Must complainants pay a fee? Yes (refunded if complainant wins); fee = € 21.34Types of resolution provided Recommendation, not binding on either party Maximum that can be awarded Maximum that can be awarded = € 50,000Minimum that can be claimed No minimum amountProducts / types of business coveredDeposits NoneLoans NoneMortgages NoneCredit cards All banks in country, both national and foreign-ownedPayment services All banks in country, both national and foreign-ownedElectronic money All banks in country, both national and foreign-owned

www.

http://www.


Insurance Ombudsman (Latvia)Name, in national language Latvijas Apdrošinātāju asociācija OmbudsName, in English Latvian Insurers Association OmbudsmanWebsite address www.laa.lvE-mail address for enquiries [email protected] number + 371 67 360 898Fax number + 371 67 360 838Address 6 Biekensalas street, office 218, Riga, LV-1004Status / governanceType of ombudsman scheme Part of industry associationStatus PrivateOmbudsman appointed by Body with majority of members from financial businessesFunding from Case fees paid by financial businessesIs the ombudsman scheme a member of FIN-NET?

Not yet, but would like to join


Does not comply with Recommendation 98/257/EC


Yes


Time limit = 1 month


No

Must complainants pay a fee? Yes (refunded if complainant wins): fee = €30 to €300Types of resolution provided Recommendation, not binding on either party Maximum that can be awarded Maximum that can be awarded =

life insurance: €2,857travel insurance: €2,857motor vehicle insurance: €28,571property insurance: €142,857

Minimum that can be claimed No minimum amountProducts / types of business coveredNon-life insurance all insurers in country, both national and foreign-owned;

but not intermediariesLife insurance all insurers in country, both national and foreign-owned;

but not intermediariesPackaged investments NoneCompany stocks and shares None

www.laa.lv


Motor Insurers’ Bureau (Latvia)

Name, in national language Latvijas Transportlīdzekļu apdrošinātāju birojs

Name, in English Motor Insurers' Bureau of Latvia

Website address www.ltab.lv

E-mail address for enquiries [email protected]

Phone number + 371 67 114 300

Fax number + 371 67 114 333

Address 9 Lomonosova street, Riga, LV-1019

Status / governance

Type of ADR scheme Part of industry association

Status Established by law

Decision-maker appointed by Body with majority of members from financial industry

Funding from Insurance industry

Is the ADR scheme a member of FIN-NET?

No

If the ADR scheme is not a member of FIN-NET, say why


Complaints / outcomes

Takes complaints from Motor liability third party Consumers Micro-enterprises (EU definition) Small and medium enterprises (EU definition) Larger businesses Insurance companies

Must complainant complain to financial business first?

No


No time limit


No

Must complainants pay a fee? No

Types of resolution provided Recommendation, not binding on either party

Maximum that can be awarded No maximum amount

Minimum that can be claimed No minimum amount

Products / types of business covered

Motor third-party liabilityinsurance

All insurers in country, both national and foreign-owned, that areauthorised to issue motor third party liability insurance

www.lta


LithuaniaLietuva

Basic information

Lithuania joined the European Union in 2004. It currently retains its national currency, but with a fixed exchange rate to the Euro.






A 2005 study by one of the authors of this report, as part of an EU assistance programme, noted:

Lithuanian consumers lacked confidence in financial services – resulting, for example, from loss of deposits shortly after Lithuania regained its independence.

Access to out-of-court redress could be a significant factor in developing consumer confidence in, and use of, financial services – both within Lithuania and cross-border.

Redress was currently provided through the Insurance Supervisory Commission (for insurance) and the State Consumer Rights Protection Authority (for other financial services).

Both were state bodies, established by law, independent of financial businesses and consumers. Their decisions were advisory, not binding.

The Insurance Supervisory Commission’s redress scheme was virtually ready for membership of FIN-NET, but required some modifications to its rules.

The State Consumer Rights Protection Authority’s redress scheme was working towards being ready for membership of FIN-NET, but had a little further to go.

Some modifications were required to its draft law, and it would need to develop technical expertise in financial services.

It would be helpful to harmonise discrepancies between the basis of decision and time limits used by the Insurance Supervisory Commission and the State Consumer Rights Protection Authority.



The Lithuanian Banking Association was developing its thinking about creating an ombudsman scheme. But there were no draft rules yet available for inspection.

There were two, and potentially three, bodies operating in a comparatively small market place –whereas the trend elsewhere was towards a single body with comprehensive jurisdiction.

It would be helpful if the financial industry were to develop codes of conduct, to promote fair competition and provide greater clarity on good practice for financial businesses and consumers.

It would be preferable if the financial industry were to consult consumers and the State Consumer Rights Protection Authority on the contents of the codes.

The World Bank’s 2009 Diagnostic Review of Consumer Protection and Financial Literacy in Lithuania34

noted:

The key financial supervisory agencies were in place and had established basic rules of market conduct for business with retail customers.

The State Consumer Rights Protection Authority had been established. It covered the field of financial services and was a member of FIN-NET.

But it had power only to make recommendations. If these were ignored, it could publish the fact, but this appeared to have minimal impact.

Additionally, the Insurance Supervisory Commission had powers, under insurance law, to enforce consumer protection issues in insurance.

The Bank of Lithuania, as regulator of credit institutions, had no authority over disputes between consumers and banks.

Consumers had increased their use of financial services and would need a strengthened consumer protection framework.

Household exposure to Euros (through borrowing etc) was twice the exposure to the national currency.


The financial professional associations should develop a format for simple and standard ‘key facts’ disclosures for each major retail product, subject to review by the financial regulatory bodies.

The financial professional associations should develop codes of conduct, subject to review by the State Consumer Rights Protection Authority and the financial regulatory bodies.

The codes of conduct should include guidelines for the time limits within which financial businesses should respond to complaints.

All financial businesses should be obliged to have a designated official, or department, responsible for receiving consumer complaints.

It would be helpful if the Consumer Protection Law were amended to enable the State Consumer Rights Protection Authority to create a coordinating forum with the financial regulatory bodies.

The State Consumer Rights Protection Authority should be given legal authority to make decisions binding on financial businesses.

The Insurance Supervisory Commission should retain its consumer protection role in insurance while the State Consumer Rights Protection Authority increases its capacity and expertise.

34 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/Lithuania_CP_Vol1_En.pdf



The Insurance Supervisory Commission should be given legal authority to make decisions binding on insurance businesses.

The State Consumer Rights Protection Authority could be the central point for receiving all complaints, passing insurance ones to the Insurance Supervisory Commission at present.

At a later stage, consumer protection in insurance should pass from the Insurance Supervisory Commission to the State Consumer Rights Protection Authority.

In the longer term, the State Consumer Rights Protection Authority was likely to become overwhelmed and consideration should be given to establishing a statutory financial ombudsman.

Based on experience elsewhere, a proactive financial ombudsman could build public confidence in financial services and increase the use of financial services by retail customers.


The Insurance Supervisory Commission (Draudimo priežiūros komisija) covers consumer complaints about insurance. The State Consumer Rights Protection Authority (Valstybinė vartotojų teisių apsaugos tarnyba) covers the rest of financial businesses.

It is currently projected that, probably from 1 January 2012, supervision of the entire financial market will pass to the Bank of Lithuania. The Insurance Supervisory Commission, and the Securities Commission, will cease to exist as separate institutions.

The arrangements for consumer complaints have not yet been decided. Options under consideration include all consumer complaints about financial businesses going to:

the State Consumer Rights Protection Authority; the Bank of Lithuania; or a newly-established financial ombudsman.

The tables at the end of this chapter give fuller information on the existing consumer complaints arrangements of the:

State Consumer Rights Protection Authority; and Insurance Supervisory Commission.

The State Consumer Rights Protection Authority is a member of FIN-NET. The Insurance Supervisory Commission not a member.

Conclusions

In banking, consumers have free access to the government-appointed State Consumer Rights Protection Authority – which provides mediation, non-binding recommendations and decisions that are binding on both parties. It is a member of FIN-NET, for cross-border disputes.

In insurance, consumers have free access to the government-appointed Insurance Supervisory Commission – which provides mediation and non-binding recommendations. It is not a member of FIN-NET.

As a result of forthcoming changes to the regulatory arrangements, expected in 2012, the arrangements for out-of-court redress may change. But the position has not yet been decided.


As recommended in 2009, if out-of-court redress remains with the State Consumer Rights Protection Authority, it should be given the necessary powers and resources – or consideration should be given to creating a financial ombudsman, which should adopt the standards that would enable it to become a member of FIN-NET.


State Consumer Rights Protection Authority (Lithuania)Name, in national language Valstybinė vartotojų teisių apsaugos tarnybaName, in English State Consumer Rights Protection AuthorityWebsite address www.vvtat.ltE-mail address for enquiries [email protected] number +370 5 262 6751Fax number +370 5 279 1466Address Vilniaus str. 25, VilniusStatus / governanceType of ombudsman scheme Part of government consumer protection bodyStatus Public, established by lawDecision maker appointed by GovernmentFunding from GovernmentIs the ADR a member of FIN-NET?

Yes


No


Yes


Recommendation, not binding on either party Decision – binding on both financial business and consumer

Maximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredDeposits All banks in country, both national and foreign-owned






Non-life insurance NoneLife insurance NonePackaged investments NoneCompany stocks and shares None

www.vvtat.lt


Insurance Supervisory Commission – complaints (Lithuania) until 31 December 2011Name, in national language Draudimo priežiūros komisijaName, in English Insurance Supervisory CommissionWebsite address www.dpk.ltE-mail address for enquiries [email protected] number + 370 5243 1370Fax number + 370 5272 3689Address Ukmergės g. 222, LT-07157 VilniusStatus / governanceType of ADR Part of financial regulatorStatus Public, established by lawDecision maker appointed by GovernmentFunding from Government and levy paid by industryIs the ADR a member of FIN-NET?

No




Yes


Time limit = 2 month


Yes


Recommendation, not binding on either party Maximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredNon-life insurance All insurers in country, both national and foreign-ownedLife insurance All insurers in country, both national and foreign-owned

www.dpk.lt


PolandPolska

Basic information

Poland joined the European Union in 2004. It currently retains its national currency, with a floating exchange rate to the Euro.






This is the first report from The World Bank regarding this topic in Poland.


There is a wide range of ADRs in Poland:

local consumer ombudsmen; insurance ombudsman; arbitration for insurance; banking ombudsman; arbitration through the financial regulator; and regional arbitration.

Local consumer ombudsmen (owiatowy/miejski rzecznik konsumentów) operate within the structure of local government, covering all consumer sectors – though seldom financial services. They operate informally without special procedures, but their recommendations are often accepted by businesses.

The Insurance Ombudsman (Rzecznik Ubezpieczonych) investigates cases and makes non-binding recommendations. If the financial business does not accept the recommendation, the ombudsman will issue a legal opinion that the consumer can produce in the Arbitration Court.


http://data.world


The Arbitration Court at the Insurance Ombudsman (Sąd Polubowny przy Rzeczniku Ubezpieczonych) resolves disputes about insurance contracts, open pension funds contracts and employee pension programmes. But the costs are quite high, coming close to those in the courts.

The Permanent Consumer Arbitration Courts (Stałe Polubowne Sądy Konsumenckie) operate within the Regional Comptroller of Trade Inspection and comprise 31 regional arbitration courts. They cover all consumer sectors.

The Arbitration Court at the Polish Financial Supervision Authority (Sąd Polubowny przy Komisji Nadzoru Finansowego) covers banking (including mortgages, payment services and electronic money) and insurance, but requires the consumer to pay a fee of €62.

The Arbitration Court at the Polish Financial Supervision Authority, the Permanent Consumer Arbitration Courts and the Arbitration Court at the Insurance Ombudsman are seldom used. They only have jurisdiction if both the parties agree, and financial businesses seldom do.

If both the parties do agree to arbitration, the decisions are as binding as those of the civil courts and there is no appeal – though a party may apply to the civil courts for the decision to be annulled if it was issued in violation of the law.

The Banking Ombudsman (Arbiter Bankowy) deals with disputes between consumers and members of the Alliance of Polish Banks (Związek Banków Polskich) and six co-operative banks that have agreed to be covered by the banking ombudsman.

The Banking Ombudsman is a lawyer, appointed by the Alliance of Polish Banks. The ombudsman’s decisions are binding on the bank, but the consumer may refer the case to court instead.


Arbitration Court at the Polish Financial Supervision Authority; Banking Ombudsman; and Insurance Ombudsman.

All three are members of FIN-NET.

In relation to the Banking Ombudsman there are ongoing discussions about:

extending coverage to include also payment services providers other than banks; accepting complaints from small and medium-sized enterprises, as well as consumers; and increasing the maximum of €2,000 that can be awarded.

Conclusions

In banking, consumers have access to the industry-appointed Banking Ombudsman, which provides a decision that binds the financial business but not the consumer. Consumers must pay a fee of €12.50, which is refunded if they win.

In insurance, consumers have free access to the government-appointed Insurance Ombudsman, which provides a non-binding recommendation – with the possibility, at some cost, of going on to arbitration.

In both banking and insurance, consumers have the alternative of access to the Arbitration Court at the Financial Supervisory Authority, which provides mediation and decisions binding on both parties. Consumers must pay a fee of €62.00, which is refunded if they win.


The Banking Ombudsman, Insurance Ombudsman and Arbitration Court at the Financial Supervisory Authority are all members of FIN-NET to handle cross-border disputes.


Arbitration Court at Financial Supervision Authority (Poland)Name, in national language Sąd Polubowny przy Komisji Nadzoru FinansowegoName, in English Arbitration Court at the Financial Supervision AuthorityWebsite address www.knf.gov.pl/regulacje/Sad_Polubowny/index.htmlE-mail address for enquiries [email protected] number + 48 222 624 054Fax numberAddress Plac Powstańców Warszawy 1, 00-380 WarszawaStatus / governanceType of ADR scheme Part of financial regulatorStatus PublicDecision maker appointed by RegulatorFunding from Regulator, and case fees paid by complainantsIs ADR a member of FIN-NET? YesComplaints / outcomesTakes complaints from Consumers



No


No time limit


No

Must complainants pay a fee? Yes (refunded if complainant wins); fee = €62Types of resolution provided Mediation

Decision – binding on both financial business and consumerMaximum that can be awarded No maximum amountMinimum that can be claimed Minimum that can be claimed = €125Products / types of business coveredDeposits All banks in country, both national and foreign-owned








Packaged investments NoneCompany stocks and shares None

www.knf.gov.pl/regulacje/Sad_Polu


Banking Ombudsman (Poland)Name, in national language Arbiter BankowyName, in English Banking OmbudsmanWebsite address www.zbp.pl/arbiterE-mail address for enquiries [email protected] number +48 224 868 400Fax numberAddress ul. Kruczkowskiego 8, 00-380 WarszawaStatus / governanceType of ombudsman scheme Part of industry associationStatus PrivateOmbudsman appointed by Body with majority of members from financial industryFunding from Levy paid by industry

case fees paid by complainantsIs the ombudsman scheme a member of FIN-NET?

Yes


Yes




No

Must complainants pay a fee? Yes (refunded if complainant wins); fee = € 12.50Types of resolution provided Decision - binding on financial business, but not on consumerMaximum that can be awarded Maximum that can be awarded = € 2,000Minimum that can be claimed No minimum amountProducts / types of business coveredDeposits Members of the only bank association and volunteer banksCredit cards and loans Members of the only bank association and volunteer banksMortgages Members of the only bank association and volunteer banksPayment services Members of the only bank association and volunteer banksElectronic money Members of the only bank association and volunteer banks

www.z


Insurance Ombudsman (Poland)Name, in national language Rzecznik UbezpieczonychName, in English The Polish Insurance OmbudsmanWebsite address www.rzu.gov.plE-mail address for enquiries [email protected] number + 48 223 337 328Fax number + 48 223 337 329Address Aleje Jerozolimskie 44, 00-024 WarszawaStatus / governanceType of ombudsman scheme Legally separate ombudsman schemeStatus Established by lawOmbudsman appointed by GovernmentFunding from Levy paid by industryIs the ombudsman scheme a member of FIN-NET?

Yes




No




No

Must complainants pay a fee? NoTypes of resolution provided Recommendation, not binding on either partyMaximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredNon-life insurance All insurers in country, both national and foreign-owned

all intermediaries in countryLife insurance All insurers in country, both national and foreign-owned

all intermediaries in countryPackaged investments NoneCompany stocks and shares None

www.rzu.gov.pl


RomaniaRomânia

Basic information

Romania joined the European Union in 2007. It currently retains its national currency.






The World Bank’s 2010 Analysis of the Financial Literacy Survey in Romania37 noted a low level of financial literacy – equivalent to 31 on a scale from 0 to 100.

The World Bank’s 2009 Diagnostic Review of Consumer Protection and Financial Literacy in Romania38

noted:

The rapid expansion of lending (more than half in foreign currency) and other financial services highlighted the need for strong consumer protection.

A common complaint concerned the lack of transparency in relation to fees, charges and commissions – and lack of notice of later changes in fees and charges.

Most banks had internal procedures for dealing with consumer complaints, but these were neither published nor well-publicised – and outcomes were not recorded.

The National Authority for Consumers’ Protection covered consumer protection in all sectors of the economy, although its expertise in financial issues was limited.

The banking and securities regulators left the resolution of consumer complaints to the National Authority for Consumers’ Protection and to the courts.

By contrast, the insurance and private pensions regulators tried to resolve consumer complaints by non-binding recommendations.

36 http://data.worldbank.org/indicator/FS.AST.DOMS.GD.ZS 37 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/Romania_Financial_Literacy_June_2010.pdf 38 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/RO_-_CPFL_Vol_I.pdf

http://data.world




Romania had no system of small-claims courts for dealing more quickly and informally with disputes about smaller amounts.

A Special Projects Initiative (SPI) had been established as a public-private partnership with support from The World Bank and partly funded by Italy.

The SPI undertook projects on consumer protection and financial literacy, including producing proposals for a financial ombudsman (with input from one of the authors of this report).39

An economic impact study by SPI showed that an ombudsman would provide net positive benefit to the banking sector.

Establishment of a financial ombudsman by the Association of Romanian Banks would prompt the adoption of an industry code of conduct.


An efficient means of resolving consumer complaints lies at the heart of consumer confidence in the financial sector.

The National Authority for Consumers’ Protection should establish a separate department or unit to deal with financial services issues.

Consideration should also be given to the possible creation of a special financial consumer protection agency.

The professional associations should be encouraged to develop consumer protection codes for each segment of the financial sector.

The financial regulators should require all financial businesses to have clear procedures (with time limits) for handling and resolving consumer complaints.

A financial ombudsman or other similar procedure should be put in place to strengthen confidence of consumers in using financial services. It should become a member of FIN-NET.

As a first step, ombudsmen could be established by the professional associations. If this did not prove sufficiently effective, consideration should be given to establishing an ombudsman by law.


There are six out-of-court redress schemes in financial services that are said to be operating, or being created:

for cross-border transfers only, the National Bank of Romania, Legal Department(Banca Naţională a României, Direcţiei Juridice)

Banking Mediator [ombudsman] (Mediatorul Bancar);

Union of Banking Mediators (Uniunea Mediatorilor Bancari din România);

Association of Mediators in the Financial-Banking Field – FINBAN(Asociatia de mediatori din Domeniul Financiar Bancar – FINBAN);

Insurance Arbitration Commission (Comisia de Arbitraj în domeniul asigurarilor si reasigurarilor de pe lânga Uniunea Nationala a Societatilor de Asigurare si Reasigurare din Romania); and

39 www.spi-romania.eu/admin/filemanager/files/program2007/c__background_study.pdf

www.spi


Bucharest Stock Exchange Arbitration Court (Camerei Arbitrale a Bursei de Valori Bucuresti S.A).

Some of these have not responded to requests for information about the bodies and their work. So the information in this section is supplemented by details from:

‘Mediation of disputes related to cross-border transfers’ on the website of the National Bank of Romania;40

the Director of the European Consumer Centre in Romania (Centrul European al Consumatorilor din Romania);

a March 2011 presentation on ADR in financial services in Romania by Professor Carmen Bălan of the Academy of Economic Studies, Faculty of Marketing, Bucharest;

a Romanian member of the European Union’s Financial Services User Group; and

the Mediation Council (Consiliul de mediere) with which 67 mediation bodies are registered.

The Mediation Council is a public-interest body based in Bucharest. It promotes mediation, develops standards for mediation training, authorises mediators, represents the interests of authorized mediators, produces a code of ethics and proposes improvements to the regulation of mediation.

The courts in Romania now recommend consumers to use mediation before beginning court proceedings. Mediation is covered by Law 192/2006, which came into effect in 2008.

In 2008, following on from the SPI (referred to in the previous section of this chapter), the National Bank of Romania approved a proposal by the Romanian Banking Association (Asociaţia Română a Băncilor) to create a banking ombudsman.

The banking ombudsman was to be established (as a private, voluntary and independent system) by the banking association acting in partnership with the National Consumer Protection Authority (ANPC), the National Bank of Romania and the Ministry of Economic Affairs and Finance.

The Romanian Banking Association registered the name Mediatorul Bancar with the State Office for Inventions and Trademarks – hence using terminology which may confuse consumers about the difference between mediation and the wider role of an ombudsman.

In 2009, the Union of Banking Mediators (Uniunea Mediatorilor Bancari din România) was established by a group of mediators – as a completely separate initiative from the Mediatorul Bancar.

The Union of Banking Mediators is prepared to provide mediation in relation to claims made by customers, by banks or between bank employees. Claims by customers (whether individuals or companies) may include all the usual sorts of complaints brought by customers against banks plus ‘unjustified registration as bad debtor with the Central Register of Banking Risks and with the Credit Bureau.’

Claims by banks may include: late payment; non-payment; threatening, insulting, slandering or striking bank employees; ‘denigration of bank in mass media by customers’; and ‘registration of unjust complaints with the National Authority for Consumer Protection and the National Bank of Romania.’

In 2010 the Romanian Banking Association published a short statement saying that the Union of Banking Mediators was not its initiative, and that it was continuing its efforts to establish an out-of- 40 www.bnr.ro/Mediation-of-disputes-related-to-cross-border-transfers-3312.aspx

www.


court redress scheme that would be recognised by the banking industry and provide an appropriate level of professionalism and knowledge.

Later in 2010, according to the Mediation Council, the Romanian Banking Association encouraged the establishment of the Association of Mediators in the Financial-Banking Field – FINBAN (Asociatia de mediatori din Domeniul Financiar Bancar – FINBAN).

The Council says that FINBAN was established by a number of mediators with relevant industry knowledge – being former bankers – and is recommended by the Romanian Banking Association as the first option for mediation.

FINBAN has published procedures for consumers in relation to mediation of claims against banks and other financial businesses. It is also helping financial businesses to organise their internal arrangements for handling consumer complaints.


National Bank of Romania, Legal Department; Union of Banking Mediators; Association of Mediators in the Financial-Banking Field – FINBAN; Insurance Arbitration Commission; and Bucharest Stock Exchange Arbitration Court.

According to the experience of the European Consumer Centre in Romania, ADR is seldom used in Romania and consumers are reluctant to pay for the mediation.

The work of the Insurance Arbitration Commission and the Bucharest Stock Exchange Arbitration Court appears to focus on disputes between one financial business and another, rather than disputes between consumers and financial businesses.

None of these bodies is a member of FIN-NET, but the Union of Banking Mediators has put itself forward as a candidate for membership, and the Association of Mediators in the Financial-Banking Field – FINBAN says that it plans to apply for membership.

Conclusions

In banking, the National Bank of Romania provides a non-binding recommendation in disputes about cross-border transfers.

The banking ombudsman proposed by the Special Projects Initiative has not been established.

Consumers have access to the Union of Banking Mediators and the Association of Mediators in the Financial-Banking Field – FINBAN, but they both charge consumers a non-returnable fee and provide only mediation.

In insurance, there is the industry-appointed Insurance Arbitration Commission – but this charges consumers a non-returnable fee, provides only mediation and focuses on business-to-business disputes.

None of these bodies is a member of FIN-NET to cover cross-border complaints – though the Union of Banking Mediators has put itself forward as a candidate and the Association of Mediators in the Financial-Banking Field – FINBAN says it plans to apply.


National Bank (Romania)Name, in national language Banca Naţională a României, Direcţiei JuridiceName, in English National Bank of Romania, Legal Department Website address www.bnr.ro/Mediation-of-disputes-related-to-cross-border-transfers-3312.aspxE-mail address for enquiriesPhone number + 40 21 312 43 75Fax number + 40 21 314 97 52Address 25, Lipscani St., Bucharest, 030031Status / governanceType of ADR scheme RegulatorStatus PublicDecision makers appointed by RegulatorFunding from Not statedIs the ADR a member of FIN-NET?

No


Not stated




Not stated


Not stated


Not stated

Must complainants pay a fee? Not statedTypes of resolution provided Non-binding recommendationMaximum that can be awarded €50,000Minimum that can be claimed Not statedProducts / types of business coveredPayment services Only for cross-border transfers:

All banks in country, both national and foreign-owned all other businesses in country

www.bnr.ro/Mediation


Banking Mediators (Romania)Name, in national language Uniunea Mediatorilor Bancari din RomâniaName, in English Romanian Union of Banking Mediators Website address www.mediatorbancar.roE-mail address for enquiries [email protected] number + 40 724 748 049Fax number + 40 216 281 218Address Bd-ul Chisinau nr.8 bl. M2,sc.C,parter, ap. 81 sector 2, BucharestStatus / governanceType of ADR scheme Professional association registered with the Mediation CouncilStatus PrivateDecision makers appointed by AssociatesFunding from Case fees paid by complainantsIs the ADR a member of FIN-NET? NoIf the ADR is not a member of FIN-NET, say why

Has put itself forward as a candidate




Yes




No

Must complainants pay a fee? Yes: amount not stated (none refunded – unless the mediation is discontinued, in which event 50% is refunded)

Types of resolution provided MediationMaximum that can be awarded Not statedMinimum that can be claimed Not statedProducts / types of business coveredDeposits All banks in country, both national and foreign-owned


Credit cards and loans All banks in country, both national and foreign-owned all credit unions in country all other businesses in country all intermediaries in country

Mortgages All banks in country, both national and foreign-owned all credit unions in country all other businesses in country all intermediaries in country


Electronic money All banks in country, both national and foreign-owned all other businesses in country

Non-life insurance All insurers in country, both national and foreign-ownedLife insurance All insurers in country, both national and foreign-ownedPackaged investments NoneCompany stocks and shares None

www.mediator


Association of Mediators in Financial - Banking Field FINBAN (Romania)Name, in national language Asociatia de mediatori din Domeniul Financiar Bancar – FINBAN Name, in English Association of Mediators in Financial-Banking Field – FINBANWebsite address www.finban.roE-mail address for enquiries [email protected] number + 40 727 727 880Fax number + 40 318 146 180Address Negru Voda Street no. 3 office 16,, Sector 3. BucharestStatus / governanceType of ADR scheme Professional association registered with the Mediation CouncilStatus PrivateDecision makers appointed by AssociatesFunding from Members fees, consultancy and trainingIs the ADR a member of FIN-NET? NoIf the ADR is not a member of FIN-NET, say why

Says it intends to apply for membership


Micro-enterprises (EU definition) Small and medium enterprises (EU definition) Larger businesses Other Financial Institutions


No




No

Must complainants pay a fee? Yes: amount not stated Types of resolution provided Mediation Maximum that can be awarded Not statedMinimum that can be claimed Not statedProducts / types of business coveredDeposits All banks in country, both national and foreign-owned


Credit cards and loans All banks in country, both national and foreign-owned all credit unions in country all other businesses in country

Mortgages All banks in country, both national and foreign-owned all credit unions in country all other businesses in country


Electronic money All banks in country, both national and foreign-owned all other businesses in country

Non-life insurance All insurers in country, both national and foreign-ownedLife insurance All insurers in country, both national and foreign-ownedPackaged investments Fund AdministratorsCompany stocks and shares Brokers and depositors

www.fin


Insurance Arbitration Commission (Romania)Name, in national language Comisia de Arbitraj în domeniul asigurarilor si reasigurarilor de pe

lânga Uniunea Nationala a Societatilor de Asigurare si Reasigurare din Romania

Name, in English Insurance and Reinsurance Arbitration Commission within the National Association of Insurance and Reinsurance Companies

Website address http://unsar.ro/comisia-de-arbitraj-in-asigurarireasigurariE-mail address for enquiries [email protected] number + 40 314 057 328Fax number + 40 213 177 832Address Not statedStatus / governanceType of ADR scheme Part of industry associationStatus PrivateDecision maker appointed by Body with a majority of members from financial industryFunding from Case fees paid by complainantsIs ADR a member of FIN-NET? NoIf the ADR is not a member of FIN-NET, say why

Not stated

Complaints / outcomesTakes complaints from Those parties who agreed to arbitration in the insurance contractMust they complain to financial business first?

Not stated


Not stated


Not stated

Must complainants pay a fee? Yes (not refunded): amount not statedTypes of resolution provided MediationMaximum that can be awarded Not statedMinimum that can be claimed Not statedProducts / types of business coveredNon-life insurance All insurers in country, both national and foreign-ownedLife insurance All insurers in country, both national and foreign-ownedPackaged investments NoneCompany stocks and shares None

http://unsar.ro/comisia


Bucharest Stock Exchange Arbitration Court (Romania)Name, in national language Camerei Arbitrale a Bursei de Valori Bucuresti S.AName, in English Bucharest Stock Exchange Arbitration CourtWebsite address http://www.bvb.ro/Regulations/RegCamArbit.aspxE-mail address for enquiries [email protected] number (+40)(21) 307 95 00Fax number (+40)(21) 307 95 19Address 34 - 36 Carol I Boulevard 020922, 14th Floor, Bucharest, sector 2Status / governanceType of ADR scheme Part of the stock exchangeStatus PrivateDecision maker appointed by Body with a majority of members from financial industryFunding from Case fees paid by complainantsIs ADR a member of FIN-NET? NoIf the ADR is not a member of FIN-NET, say why

Not stated

Complaints / outcomesTakes complaints from Those parties who agreed to arbitration in their contract, whether:

Consumers Micro-enterprises (EU definition) Small and medium enterprises (EU definition) Larger businesses


Not stated


Not stated


Not stated

Must complainants pay a fee? Not statedTypes of resolution provided MediationMaximum that can be awarded Not statedMinimum that can be claimed Not statedProducts / types of business coveredCompany stocks and shares All companies in country, both national and foreign-owned

all intermediaries in country

www.

http://www.


SlovakiaSlovensko

Basic information

Slovakia joined the European Union in 2004. It adopted the Euro in 2009.


Domestic credit provided by the banking sector in 2008 was 53.8% of GDP (compared to 157.9% for the EU as a whole in 2009). 41




The World Bank’s 2007 Technical Note on Consumer Protection in Financial Services in Slovakia42

noted:

The National Bank of Slovakia was the integrated regulator for the financial sector, having taken over the insurance and securities responsibilities of the Financial Market Authority.

There had been substantial growth in consumer credit – but, unlike in some nearby countries, hardly any in foreign currencies.

Responsibility for enforcing consumer credit law lay with the Slovak Trade Inspection Office which lacked the necessary expertise and capability.

About 50% of consumers had bank current (cheque) accounts, 43% had life insurance and 14% had a private pension.

Slovakia was one of only three EU member states where bank deposit accounts were tied in with residential mortgages and consumer loans.

Several mechanisms were in place for customers to lodge complaints but none was sufficiently effective.

The Arbitration Court of the Slovak Bank Association now covered all customer disputes with banks but had the same weaknesses (time and expense) as the courts.

41 http://data.worldbank.org/indicator/FS.AST.DOMS.GD.ZS 42 http://siteresources.worldbank.org/INTECAREGTOPPRVSECDEV/Resources/SkCPFSVolIMainReport.pdf

http://data.world




All providers of credit should be licensed – preferably by the National Bank of Slovakia rather than a separate agency.

The National Bank of Slovakia should specify in its regulations that a current account is not required in order to receive financing from a bank.

The industry association should develop sector-specific codes of conduct and encourage financial businesses to resolve complaints.

All financial businesses should be required to maintain in-house departments for the resolution of consumer complaints.

A financial ombudsman should be created (perhaps on the Irish model) to resolve consumer complaints that are not resolved by the financial businesses themselves.

The ombudsman should: be available to consumers free-of-charge; publish an annual report of its activities; and join FIN-NET.


The only financial ADR in Slovakia is the Banking Ombudsman (Bankový ombudsman). The table at the end of this chapter gives fuller information about it. It is not a member of FIN-NET.

The rules of the Bratislava Stock Exchange provided for a tribunal, but the stock exchange has confirmed that it is not currently active in the field of out-of-court redress for consumers.

Conclusions

In banking, consumers have free access to the industry-appointed Banking Ombudsman – which provides mediation and a non-binding recommendation, if the financial business is a member of the bankers association.

In insurance, there is no financial ombudsman/ADR.

Slovakia has no member of FIN-NET to handle cross-border complaints.

As recommended in 2007, Slovakia should have a financial ombudsman – which should not be restricted to banking and which should adopt the standards that will enable it to become a member of FIN-NET.


Banking Ombudsman (Slovakia)Name, in national language Bankový ombudsmanName, in English Banking ombudsmanWebsite address www.bankovyombudsman.skE-mail address for enquiries [email protected] number + 421 257 205 309Fax number + 421 257 205 315Address Rajská 15/A, 81108 Bratislava 1Status / governanceType of ombudsman scheme Part of industry associationStatus Private, voluntaryOmbudsman appointed by Presidency of the Slovak Banking Association

(representatives of seven member banks) by simple majority Funding from Members of the Slovak Banking AssociationIs the ombudsman scheme a member of FIN-NET?

No


No support for application from Ministry of Finance


Micro-enterprises and small and medium enterprises only if a complaint relates to one product being tied-in to another.


Yes




Yes


Recommendation, not binding on either party Maximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredDeposits Members of the only bank associationCredit cards and loans Members of the only bank association Mortgages Members of the only bank associationPayment services Members of the only bank association Electronic money Members of the only bank association

www.


SloveniaSlovenija

Basic information

Slovenia joined the European Union in 2004. It adopted the Euro in 2007.

It has a population of about 2 million. Access to financial services in 2007 was 97%, compared to an average of 91% in western Europe.





This is the first report from The World Bank regarding this topic in Slovenia.


In 1982 the Triglav Insurance Company (Zavarovalnica Trigrav) established an arbitration scheme, to handle complaints about that company under the Code of Civil Procedure.

Now, the Insurance Act (article 333) requires all insurers to have an ADR for insurance services. The insurance association has established two bodies, though the consumers association (Zveza potrošnikov Slovenije) say they are little used.

The Insurance Ombudsman (Varuh Pravic s Področja Zavarovalništva) deals with disputes about infringements of the insurance code and good insurance practice, but does not deal with damages claims. The Insurance Mediation Centre (Mediacijski Center) provides mediation in damages claims.

The Banking Act (article 391) requires banks to have an ADR for banking services. The banking association established a Banking Settlement Council (Poravnalni svet pri Združenju bank Slovenije za zunajsodno reševanje sporov med banko in stranko). The consumers association claims that the Banking Settlement Council is not seen as independent.


http://data.world


The Financial Instruments Markets Act (article 294) requires stockbrokers to have or join an ADR for stockbroking services or managing financial instruments. The stock exchange in Ljubljana established a tribunal but – after six years with no cases – decided in May 2011 to abolish it.


Banking Settlement Council; Insurance Mediation Centre; and Insurance Ombudsman.

None of these is a member of FIN-NET. In each sector, the law requires financial businesses to inform consumers about the relevant ADR.

Conclusions

In banking, consumers have free access to the Banking Settlement Council, appointed by a body where half of the members come from the financial industry. It provides a non-binding recommendation.

In insurance, consumers have free access to the industry-appointed Mediation Centre (providing mediation in damages claims) and Insurance Ombudsman (providing non-binding recommendations on breaches of the insurance code or good insurance practice, but not damages claims).

Slovenia does not have a member of FIN-NET to handle cross-border complaints.

The Banking Settlement Council, Insurance Mediation Centre and Insurance Ombudsmen have not demonstrated that they comply with Commission Recommendation 1998/257/EC.

They should adopt the standards that will enable them to become members of FIN-NET (and should use the opportunity of adopting best practice from amongst their FIN-NET colleagues) or consideration should be given to establishing a financial ombudsman by law.


Banking Settlement Council (Slovenia)Name, in national language Poravnalni svet pri Združenju bank Slovenije za zunajsodno

reševanje sporov med banko in strankoName, in English Settlement Council at the Bank Association of Slovenia in Out-of-

Court Settlement of Disputes between Clients and the BankWebsite address www.zbs-giz.siE-mail address for enquiries [email protected] number + 386 1 242 97 00Fax number + 386 1 242 97 13Address Združenje bank Slovenije, za Poravnalni svet, 1000 Ljubljana,

Šubičeva 2Status / governanceType of ADR scheme Part of industry associationStatus PrivateDecision maker appointed by Body with half of members from the financial industryFunding from Levy paid by the industryIs the ADR scheme a member of FIN-NET?

No

If the ADR scheme is not a member of FIN-NET, say why

The ADR said FIN-NET membership had not been considered. It did not reply to a question about whether or not it complied with Recommendation 98/257/EC.


Yes




Yes

Must complainants pay a fee? NoTypes of resolution provided Recommendation, not binding on either party Maximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredDeposits Members of the only bank associationCredit cards and loans Members of the only bank associationMortgages Members of the only bank associationPayment services Members of the only bank association

www.z


Insurance Mediation Centre (Slovenia)Name, in national language(s) Mediacijski CenterName, in English Mediation CentreWebsite address www.zav-zdruzenje.si/resevanje_sporov.aspE-mail address for enquiries [email protected] number + 386 1 4376511Fax number + 386 1 4735692Address Slovensko Zavarovalno Združenje, Giz, Železna 14, Si-1000

LjubljanaStatus / governanceType of ombudsman scheme Part of industry associationStatus Private, voluntaryMediators appointed by Council of the Slovenian Insurance AssociationFunding from Slovenian Insurance AssociationIs the ombudsman scheme a member of FIN-NET?

No






No


No time limit


Yes

Must complainants pay a fee? NoTypes of resolution provided MediationMaximum that can be awarded No maximum amountMinimum that can be claimed No minimum amountProducts / types of business coveredNon-life insurance Members of the only insurer associationLife insurance Members of the only insurer associationPackaged investments NoneCompany stocks and shares None

www.zav


Insurance Ombudsman (Slovenia)Name, in national language(s) Varuh Pravic s Področja ZavarovalništvaName, in English Insurance OmbudsmanWebsite address www.zav-zdruzenje.si/resevanje_sporov.aspE-mail address for enquiries [email protected] number + 386 1 4376511Fax number + 386 1 4735692Address Slovensko Zavarovalno Združenje, Giz, Železna 14, Si-1000

LjubljanaStatus / governanceType of ombudsman scheme Part of industry associationStatus Private, voluntaryOmbudsman appointed by General assembly of the Slovenian Insurance AssociationFunding from Slovenian Insurance AssociationIs the ombudsman scheme a member of FIN-NET?

No






Yes


Time limit = 6 weeks


Yes

Must complainants pay a fee? NoTypes of resolution provided Recommendation, not binding on either party Maximum that can be awarded

Minimum that can be claimed

The recommendation covers whether the insurer complied with the industry code and good practice: not compensation – so there is no maximum award or minimum claim.

Products / types of business coveredNon-life insurance Members of the only insurer associationLife insurance Members of the only insurer associationPackaged investments NoneCompany stocks and shares None

www.zav

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